anyone know FHA guidelines if note holder is deceased and widow can't afford probate
I have a note holder who died in 2009. Was no will nor executor of estate for wife to be able to give authority. Wells (servicer) is stating FHA guidelines require an executor of estate for her (she is not on note nor title). She no longer lives there and I am trying to do a short sale, but keep getting stopped by the LOA. Wells is stating that the FHA guideline changed this year and that in order for her to be granted authority to short the property....she must be the executor. In the state of Washington this means probate, etc and she has basically $1000 to her name (makes $20k/year as he was breadwinner). She can't afford probate process. Meanwhile 2nd (also wells) has filed a $77k judgment against her to be granted May 28th if she doesn't answer. Any ideas if this deal can even be salvaged?
In the State of Wa. we have what is called an Affidavit of Successor of Decedent. Which is an affidavit under sworn testimony that a person has an estate of $100k or less and that the surviving spouse is granted permission to basically be in charge of what is left (I simplified this explanation by the way). Wells is not accepting this legal document in place of the executor of estate....stating that FHA will not but they are admitting they did not even ask FHA.
Replies to This Discussion
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Permalink Reply by Thom Colby CA Brkr 888-391-5245 on
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Suggest the wife find a local "Legal Aid" - they typically handle these matters at no charge since most attorney typically provide some "Pro-Bono" work each calendar year.
Also, if the wife is not on the note, then how can "2nd (also wells) has filed a $77k judgment against her to be granted May 28th if she doesn't answer". This is confusing.
Also, there is no :loophole" to be found...
She needs an attorney for appropriate legal advice - immediately !
Best of luck,
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Permalink Reply by Dean E Eshelman, CPA, CDPE, IRES on
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I take it that she is NOT on the first mortgage, but is on the 2nd Mortgage and is not on title to the home? Please clarify. She does need a legal aid attorney. Also open a ticket number with HUD for their assistance and verification of this new rule. I do not know Washington procedures. I Missouri a probate would need to be opened.
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Permalink Reply by Shannon Renner on
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Thanks to all of you that have replied!
Yes, she is on the 2nd note...not the first. No, she is not on title as the 3rd party (private investor) foreclosed thinking he was protecting his interest in the home (he had loaned the deceased husband $100k in 2007...husband died in 2009 and home has been vacant since).
The affidavit in Washington is for any estate that is $100k or less AFTER all liens, encumbrances, etc. The liens on this home all total well over $375k and the home is worth about $200k. Widow has $600 in her account as of today, and makes $24k per year.
In talking with Wells, they are insisting on probate (here the process is about 6-9 months and costs well over $2k +). They first accepted the Affidavit and now they will not as of yesterday.
I reached out to HUD yesterday to confirm the rule so I will gladly update everyone when I find out.
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